Pages

Sunday, 11 December 2016

Stories we should be thinking about

Ahead of the new working week here are a few finance and related stories to be thinking about. And as I am travelling...a bit more to the point than usual. Macro matters:
A new week...and a mega week for much of Europe especially (what Italian 'no' vote?!)...

...but to understand this please have a look at this very nice summary via @kurterozde including lots of European and CDS chat.

Barrons is bullish...

...and another year (8 in a row!) awaits on the US markets

So the Trump Bump is the driver? Well not on this interpretation of the numbers versus where some of the key metrics were at the time of the start of the Reagan Presidency:

Still, you can see why Trump is popular because this sort of metric on 'fading dreams' is not conducive to incumbent votes:

Talking about the President-elect, he is getting a bit of stick about his potential appointment of Secretary of State, the current CEO of Exxon Rex Tillerson:

Worth reading the latest Bank of International Settlements thoughts (link here) which talks about paradigm shifts although they are relative comfortable about the bond market (where I see plenty of scope for volatility if some of those big Treasury purchasers decide not to buy more)...

...but note the greater variability in monetary policy:

Now that does not seem to worry the ECB...

...nor active managers in the US who are 'more than fully invested'. Yikes!

I have worried about the strength of the US dollar to nobble this optimism. Yes, it has moved recently and - yes - it could rise further...

...a point that the chart below also shows. A very pertinent debate given the upcoming Fed decision...but my instinct is that a lot is factored in already especially given high dollar speculative balances.

Did you see the oil story from the last 24 hours which has pushed oil futures up a few percent first thing Monday?

On Saturday, 11 non-OPEC countries agreed to reduce production by 558,000 barrels a day - 300K of that coming from Russia. Following that announcement, Saudi oil minister Khalid al-Falih chimed in saying, "I can tell you with absolute certainty that effective Jan. 1 we’re going to cut and cut substantially to be below the level that we have committed to on Nov. 30."

Ouch those shorts must be hurting... My view is that oil continues to surprise.

Great demographic chart! And a bit scary...

On a similar front @JiabaoChina highlighted this link which shows how an ageing population hinders Donald Trump's job creation hopes. Demographics matter!

No words needed! You know my view: the quickest way to reduce equity is to have debt...

A final macro chart. Some great trends here...now just to think about what stocks could be relevant here.

Sector and companies:

Amazon and Facebook have fallen out of the top five...

...and talking about the big e-tailer, Amazon change their prices with high frequency, scary stuff:

In European company news:

Ailing Italian bank Monte dei Paschi di Siena (BMPS.MI) will press ahead with a last-ditch 5-billion euro ($5.27 billion) privately-funded rescue plan after the European Central Bank refused to give it more time to raise the money, a source close to the matter said.

"Wily Fox has made a perfectly timed pounce on Sky" - Murdoch owned Sunday Times on Murdoch's 21st Century Fox's bid for Murdoch chaired Sky